When chancellor George Osborne announced in November that he was considering introducing regionalised pay for teachers, the reaction from the shocked teaching unions was hostile in the extreme.

Now TES has learned that education secretary Michael Gove is set to reignite their fury by directly asking the private sector to advise on his plans to link teachers’ pay with living costs in different parts of the country.

Most worryingly for the profession, the government is calling for evidence from businesses that have experienced “difficulty in recruiting or retaining staff” as a result of national pay deals for teachers. The British Chambers of Commerce say that the current system has created an unfair “labour market distortion”, with firms in less prosperous regions unable to match salaries on offer in the public sector.

While business leaders feel that regionalising public sector pay would allow them to compete with schools on a more equitable basis, teaching unions have warned that such a move could create a recruitment crisis in less prosperous regions.

“Regionalised pay is the next big threat facing teachers,” said NUT deputy general secretary Kevin Courtney. “Taking money out of regional economies will really damage them. A job’s a job; all teachers should be paid equally to do that job. We can’t rule out industrial action over this issue.”

Members of the School Teachers’ Review Body (STRB) - the organisation Mr Gove is legally obliged to consult if he wants to alter teachers’ conditions of employment - have yet to receive their remit letter, which will outline the kind of changes he is looking to make. The Department for Education first wants to appoint the next chair of the STRB, a post that was initially advertised last March and has proved difficult to fill. TES understands that the announcement of the successful candidate is imminent.

But rather than issuing the formal letter and then inviting responses from the statutory consultees - including the teaching unions and the National Governors’ Association - the government has taken the unprecedented step of first inviting feedback from the world of business. A consultation letter issued by the Office of Manpower Economics asks for advice from the private sector on what criteria businesses use to set pay in different parts of the country. It also asks for examples of where schools “have had difficulty in recruiting or retaining staff because of competition from wider public or private sector employers”.

Dr Adam Marshall, director of policy and external affairs at the British Chambers of Commerce, told TES that the “labour market distortion” is created by a national pay structure that allows schools in rural areas to offer higher salaries than local business. “The evidence we get is that a lot of promising people who could come into a private sector job end up in a public sector job because of the existence of national pay scales.”

The CBI, which represents businesses across the country, confirmed that it will also be responding to the consultation.

At present, the only part of the country in which teachers are paid differently is the London area. Teachers in inner London on the bottom rung of the main pay scale earn almost pound;5,500 a year more than their counterparts in the provinces, to help them meet the higher living costs in the capital.

Martin Freedman, head of pay, conditions and pensions at teaching union ATL, warned that regionalising pay would only create recruitment problems. “Some areas will find it very, very difficult to recruit teachers. I have no objection to helping business, but why should it be at the expense of schools?” he said.

Mr Freedman added that the move could lead to teachers migrating en masse to neighbouring, better-paid regions. “Teachers will just get a bus down the road and get pound;3,000 more.”

The trade unions also fear that the move is politically motivated. With the expansion of the academies programme eroding the importance of national pay negotiations - historically one of the main ways they exert power over government - switching to a more localised system would see unions’ influence continue to wane.

“Ministers are ideologically hell-bent on breaking up the teachers’ national pay structure,” NASUWT general secretary Chris Keates said. “Many successful national businesses recognise that, if you want to be able to guarantee a high level of service and stop costs spiralling out of control, then you have to have national pay and conditions. If it’s good enough for Tesco, Marks amp; Spencer, Sainsbury’s and BT, why isn’t it good enough for schools?”

The STRB is expected to submit its report by July. With feelings running high in the teaching unions, Mr Gove will be hoping for a swift conclusion to the pensions reform impasse if he is to avoid waging an industrial war on two fronts.

National pay

Main pay scale

Inner London

pound;27,000

Outer London

pound;25,117

Fringe

pound;22,626

Rest of England and Wales

pound;21,588

Upper pay scale

Inner London

pound;41,497

Outer London

pound;37,599

Fringe

pound;35,218

Rest of England and Wales

pound;34,181

What the government wants from businesses:

“Examples of where private sector employers have had difficulty in recruiting or retaining staff because of competition from the employers of (teachers)”

“Information on how larger private sector employers operating in multiple locations within England or Britain decide on appropriate levels of total reward for those locations”.

Original headline: Gove gets going on regionalised pay - by consulting businesses